Have home prices bottomed out? (MarketWatch)

[underdose]

Add a zero? Wow, that’s like 900% inflation. Quite a disparity between 30% and 900%. Maybe somewhere in between for the past 8 years? Hopefully not more than that in the future…

[urbanrealtor]

[quote=barnaby33]Take 2000 prices, add in zero for inflation and you have reasonable prices in todays dollars. Salaries not going up? Prices must come down. I earn LESS now than I did then in real terms and so is most everyone else.
Josh
[/quote]
Mr. G,
Thats because you live in my neighborhood and don’t shave.

[urbanrealtor]

[quote=barnaby33]Take 2000 prices, add in zero for inflation and you have reasonable prices in todays dollars. Salaries not going up? Prices must come down. I earn LESS now than I did then in real terms and so is most everyone else.
Josh
[/quote]
Mr. G,
Thats because you live in my neighborhood and don’t shave.

[urbanrealtor]

[quote=barnaby33]Take 2000 prices, add in zero for inflation and you have reasonable prices in todays dollars. Salaries not going up? Prices must come down. I earn LESS now than I did then in real terms and so is most everyone else.
Josh
[/quote]
Mr. G,
Thats because you live in my neighborhood and don’t shave.

[urbanrealtor]

[quote=barnaby33]Take 2000 prices, add in zero for inflation and you have reasonable prices in todays dollars. Salaries not going up? Prices must come down. I earn LESS now than I did then in real terms and so is most everyone else.
Josh
[/quote]
Mr. G,
Thats because you live in my neighborhood and don’t shave.

[urbanrealtor]

[quote=barnaby33]Take 2000 prices, add in zero for inflation and you have reasonable prices in todays dollars. Salaries not going up? Prices must come down. I earn LESS now than I did then in real terms and so is most everyone else.
Josh
[/quote]
Mr. G,
Thats because you live in my neighborhood and don’t shave.

[CA renter]

[quote=barnaby33]Take 2000 prices, add in zero for inflation and you have reasonable prices in todays dollars. Salaries not going up? Prices must come down. I earn LESS now than I did then in real terms and so is most everyone else.
Josh
[/quote]

Not only that, but defined benefit pension plans and 100% employer-paid health insurance plans are becoming obsolete over time. Additionally, healthcare costs, education, food, gas, etc. are all rising, which leaves LESS money for housing.

With fewer social safety nets and fewer, less-reliable employer-paid benefits, in addition to jobs being less dependable…there is much less money left over for housing.

The old 28/33% DTI ratios were calculated under much more favorable conditions. I’d say people should now spend no more than 20% of their income (maybe 25% max, for higher earners), in order to stay afloat.

[CA renter]

[quote=barnaby33]Take 2000 prices, add in zero for inflation and you have reasonable prices in todays dollars. Salaries not going up? Prices must come down. I earn LESS now than I did then in real terms and so is most everyone else.
Josh
[/quote]

Not only that, but defined benefit pension plans and 100% employer-paid health insurance plans are becoming obsolete over time. Additionally, healthcare costs, education, food, gas, etc. are all rising, which leaves LESS money for housing.

With fewer social safety nets and fewer, less-reliable employer-paid benefits, in addition to jobs being less dependable…there is much less money left over for housing.

The old 28/33% DTI ratios were calculated under much more favorable conditions. I’d say people should now spend no more than 20% of their income (maybe 25% max, for higher earners), in order to stay afloat.

[CA renter]

[quote=barnaby33]Take 2000 prices, add in zero for inflation and you have reasonable prices in todays dollars. Salaries not going up? Prices must come down. I earn LESS now than I did then in real terms and so is most everyone else.
Josh
[/quote]

Not only that, but defined benefit pension plans and 100% employer-paid health insurance plans are becoming obsolete over time. Additionally, healthcare costs, education, food, gas, etc. are all rising, which leaves LESS money for housing.

With fewer social safety nets and fewer, less-reliable employer-paid benefits, in addition to jobs being less dependable…there is much less money left over for housing.

The old 28/33% DTI ratios were calculated under much more favorable conditions. I’d say people should now spend no more than 20% of their income (maybe 25% max, for higher earners), in order to stay afloat.

[CA renter]

[quote=barnaby33]Take 2000 prices, add in zero for inflation and you have reasonable prices in todays dollars. Salaries not going up? Prices must come down. I earn LESS now than I did then in real terms and so is most everyone else.
Josh
[/quote]

Not only that, but defined benefit pension plans and 100% employer-paid health insurance plans are becoming obsolete over time. Additionally, healthcare costs, education, food, gas, etc. are all rising, which leaves LESS money for housing.

With fewer social safety nets and fewer, less-reliable employer-paid benefits, in addition to jobs being less dependable…there is much less money left over for housing.

The old 28/33% DTI ratios were calculated under much more favorable conditions. I’d say people should now spend no more than 20% of their income (maybe 25% max, for higher earners), in order to stay afloat.

[CA renter]

[quote=barnaby33]Take 2000 prices, add in zero for inflation and you have reasonable prices in todays dollars. Salaries not going up? Prices must come down. I earn LESS now than I did then in real terms and so is most everyone else.
Josh
[/quote]

Not only that, but defined benefit pension plans and 100% employer-paid health insurance plans are becoming obsolete over time. Additionally, healthcare costs, education, food, gas, etc. are all rising, which leaves LESS money for housing.

With fewer social safety nets and fewer, less-reliable employer-paid benefits, in addition to jobs being less dependable…there is much less money left over for housing.

The old 28/33% DTI ratios were calculated under much more favorable conditions. I’d say people should now spend no more than 20% of their income (maybe 25% max, for higher earners), in order to stay afloat.

[kev374]

[quote=underdose]Why do you say no more than 30% for inflation? That is an extremely modest 3-4% per year, and the arguably grossly understated CPI was running 6% for much of the bubble.[/quote]

home prices match income inflation not CPI. Real income has fallen during the last 10 years so affordability and prices will decline accordingly. Right now due to the severe unemployment situation prices will correct even more than that.

[kev374]

[quote=underdose]Why do you say no more than 30% for inflation? That is an extremely modest 3-4% per year, and the arguably grossly understated CPI was running 6% for much of the bubble.[/quote]

home prices match income inflation not CPI. Real income has fallen during the last 10 years so affordability and prices will decline accordingly. Right now due to the severe unemployment situation prices will correct even more than that.

[kev374]

[quote=underdose]Why do you say no more than 30% for inflation? That is an extremely modest 3-4% per year, and the arguably grossly understated CPI was running 6% for much of the bubble.[/quote]

home prices match income inflation not CPI. Real income has fallen during the last 10 years so affordability and prices will decline accordingly. Right now due to the severe unemployment situation prices will correct even more than that.

[kev374]

[quote=underdose]Why do you say no more than 30% for inflation? That is an extremely modest 3-4% per year, and the arguably grossly understated CPI was running 6% for much of the bubble.[/quote]

home prices match income inflation not CPI. Real income has fallen during the last 10 years so affordability and prices will decline accordingly. Right now due to the severe unemployment situation prices will correct even more than that.

[Author]

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